South Korean GDP Slows to 0.4% QoQ in Q1

The South Korean economy advanced 0.4 percent quarter-on-quarter in the March quarter of 2016, slowing from a 0.7 percent growth in the previous period, preliminary estimates showed. It is the weakest growth since the third quarter of 2015 as private consumption, facilities investment and exports contracted.

On the expenditure side, final consumption expenditure grew 0.1 percent, compared to a 1.3 percent expansion in the preceding quarter. Private consumption contracted by 0.3 percent (from +1.4 percent in Q4), as spending on durable and semi-durable decreased. Government spending grew by 1.3 percent (+1.0 percent in Q3). Gross fixed capital formation rose 1.2 percent after registering a 0.9 percent contraction in the preceding quarter. Construction investment grew by 5.9 percent (from -2.4 percent in Q4), with an increase in building construction and civil engineering. Intellectual property products investment rose by 0.1 percent (from +0.7 percent), centering around software investment. In contrast, facilities investment contracted by 5.9 percent (from -2.4 percent), with a decrease in machinery investment and transport equipment investment. Exports dropped  by 1.7 percent (from +2.1 percent), as exports of goods such as petroleum & coal products and automobiles declined. Imports fell by 3.5 percent (from +3.2 percent), mainly on a decrease in machinery & equipment and transport equipment.

On the production side, manufacturing sector fell by 0.2 percent (from +0.7 percent), as production of machinery & equipment and automobile products decreased. Electricity, gas & water supply contracted by 0.8 percent (from +0.8 percent), centering around electricity. In contrast, construction sector expanded by 3.2 percent (from +0.7 percent), with an increase in residential building construction. Services sector rose by 0.5 percent (from +0.7 percent), led by growth in finance & insurance and real estate & leasing, offsetting a decline in wholesale & retail trade, restaurants & hotels and cultural & other services. Agriculture, forestry & fishing also grew by 5.9 percent (from -2.6 percent), mainly due to an increase in livestock industry.

Year-on-year, GDP advanced 2.7 percent following a 3.1 percent expansion in the previous period. It is the weakest growth since the third quarter of 2015.

South Korean GDP Slows to 0.4% QoQ in Q1

Bank of Korea l Rida Husna |
4/26/2016 5:59:43 AM